"My country is the World. My Religion is to do Good."

Nobility and Noability: or writing the 1%

Frances A. Chiu

[A paper presented at the Left Forum at Pace University, 18 March, 2012. Frances Chiu, Ph.D. is an assistant professor in the Humanities and Social Sciences departments, The New School for Public Engagement, New York)

It is a truth universally acknowledged that Paine regarded the New World as a much more enlightened one than the Old. In Part 2 of Rights of Man, he declared that things were working out well for the new republic in spite of the diverse national origins and religions, a nation where government operates "on the principles of society and the rights of man, every difficulty retires, and all the parts are brought into cordial unison." It was a nation where "the poor are not oppressed, the rich are not privileged. Industry is not mortified by the splendid extravagance of a court rioting at its expense. Their taxes are few, because their government is just: and as there is nothing to render them wretched, there is nothing to engender riots and tumults."

Such was the America of 1792 in Paine's view -- and what a difference from Old World England, bogged down by a greedy hereditary government busily "thrusting itself into every corner and crevice of industry, and grasping the spoil of the multitude." At first glance, it would appear that "all was happiness" in such countries as England, but Paine was careful to add that "there lies hidden from the eye of common observation, a mass of wretchedness that has scarcely any other chance, than to expire in poverty or infamy." After all, it was a nation where wealthy aristocrats and their relatives shifted the burden of taxation to the poor and middling orders. A nation where it was not unusual for laborers to work until the age of 80, subsisting on our equivalent of $60 a day. A nation with no bargaining rights for workers. A nation where riots over food erupted while radical movements for constitutional reform spread across the land. And, not least, as Paine would discover for himself after publishing Part 2 of Rights of Man, a nation that suppressed dissent while pretending to champion free speech--especially of the "leveling" kind. This was England in 1792 -- a nation that was widely purported to be the most democratic European nation, where a mere baronet could quickly ascend the ranks to become a duke in less than 20 years.

Let's now fast forward 220 years from the publication of Rights of Man, Parts and 1 and 2. Is America still a nation where the poor are not oppressed and the rich are not privileged? Unfortunately, I think most of us know the answer to that question--because the truth is that at this point in our history, we are farther away from Paine's America, and closer to his England. If anything, it could be argued that current socio-economic and political trends are pushing America back across the Atlantic to a time when men and women were governed by bigwigs, literally and figuratively speaking. Or perhaps to the early 20th at latest: which just might explain our current obsessions with the umpteenth adaptation of Pride and Prejudice -- great as it is -- or Downton Abbey. (Or more appropriately, Uptown Abbey -- and, really, any costume drama that revolves around stately houses, well-spoken masters, and deferential servants.) What I want to do in my presentation is explore a few uncanny affinities between 18th- and 20th-century patterns of power, showing how Paine's analysis of his world remains as relevant as ever, if not more so, in regard to our changing wealth distribution and political power: both of which have dangerous repercussions on other facets of our lives. Although we have neither a monarch nor any form of hereditary government, our declining social mobility and political power--in stark contrast to that of the one-percenters--show that we have not learned much from Paine.

Let's begin with a preliminary comparison of wealth distribution in 18th century England and our own: Back then, the aristocracy and gentry made up nearly 1% of the population but their incomes--derived largely from property rather than financial assets today, comprised nearly 25% of the national income: which, incidentally, fall in almost exactly in the same proportions as they were in 1929 and in 2007 -- that is, right before the Great Depression and Great Recession. Even more interesting is how the incomes seem to correlate with ours today. The wealthiest aristocrats, the dukes and earls--the top tenth of the 1% then -- enjoyed annual sums of 10,000 -50,000 pounds a year--which translates roughly to 20 million to a 100 million dollars today. Further down in the 1% was the wealthier segment of the gentry whose income ranged from 1000 to 3000 pounds, equivalent to somewhere between 1.6 and 4.8 million dollars a year. At the next rung down were those whose work entailed some degree of training or education, including teachers, clergy, attorneys, bankers, merchants -- with incomes ranging from 40 to 400 pounds a year -- equivalent to $60,000 to $600,000: these men comprised 40% of the population. Finally, nearly 50% were poor, with the bottom 20% receiving some sort of parish assistance: generally, the poor made no more than 20 pounds a year, equivalent to 24,000 dollars a year.

By the end of the 18th century, the haves gained even more as aristocrats outearned their predecessors from the previous century while personal and material losses for everyone else mounted. Aristocrats not only doubled their income by raising rents and acquiring more land when they accelerated the enclosure of the commons, but also managed to shift much of the burden of taxation from land to articles of consumption. Indeed, national income derived from the land tax was nearly halved from 33% at the beginning of the century to 17% at the end. The story was different, however, for those at the lower end of middling who lost whatever independence they once possessed and suffered declining wages, especially by 1813 with the repeal of the apprenticeship laws. Laborers would also lose benefits in the form of meals at their employers' tables -- not unlike the way many in the middle classes today have lost employer provided health insurance and pensions.

Let's now shift to the present. Today, we find a significant rise in the incomes of the wealthy today on top of a sharply reduced rate of taxation. The ratio of CEOs and upper management salaries to those of the average worker--343x, to be exact -- is far more than in any developed nation, as Japanese, German, French, and British CEOs make 11, 12, 15 and 22x respectively. Moreover, even though tax rates on the wealthy in America have been all over the place during the last century, it is striking that the highest rates, enacted during Hoover's and Roosevelt's terms, remained intact for at least 3 decades before becoming steadily reduced to 39% by the end of the 20th century -- and to 36.5% afterwards. It's equally striking too that just as in the 18th century, nearly one out of two people in 2011 are either low income or poor -- and that the poverty rate today is the highest it's been since 1993, at 15.3%. Overall, the US enjoys less social mobility and more child poverty than Canada, France, and yes Britain, such that one is more likely to remain in his/her parents' social rank: so much for the Horatio Alger myth in America, the new "Old World."

This is where Paine comes in. Although dukes, earls and other lords had always been vaguely distrusted by the 99% -- we see this in much of the literature of the time, from Defoe to Fielding and Richardson -- it was Paine who clearly articulated the problems posed by the landed elites. In response to Edmund Burke, who famously defended the aristocratic retention of political power while asserting that there was nothing wrong with pride of birth -- such men were better educated than the "swinish multitude" and were more moral, Paine made four important points.

First off, these high and mighty men harbored a fundamentally flawed sense of "distributive justice." How could they not when the laws of primogeniture decreed that the eldest son was to inherit the title and estate? As Paine put it, heirs "begin life by trampling on all their younger brothers and sisters, and relations of every kind, and are taught and educated so to do." How could one exert any sense of justice or honour in a house of legislation when he absorbs "in his own person the inheritance of a whole family of children or doles out to them some pitiful portion with the insolence of a gift?" Secondly, a body of men "holding themselves accountable to nobody, ought not to be trusted by anybody." Thirdly, why did "the landed interest require more money than other interest in the state" and "what right has it to a distinct and separate representation from the general interest of a nation?" For instance, why wasn't there a comparable house of brewers or bakers? Paine noted that "the only use to be made of this power, and which it has always made, is to ward off taxes from itself, and throw the burthen upon such articles of consumption by which itself would be least affected" whether it be soap, paper, or candles. Fourthly, circumstances were such that the aristocracy didn't even need to pay taxes on alcohol since they often brewed their own beer. In fact, sometimes their privately held natural resources and commodities allowed them to profit at the expense of the people. The Duke of Richmond, as Paine pointed out, was able to supplement his income through taxes on coal from his mine: "it is horrid that any man, more especially at the price of coals now are, should live on the distresses of a community; and any government permitting such an abuse, deserves to be dismissed."

Let's look a little more closely at the present ramifications of these problems which Paine identified: a sense of privilege, lack of accountability, greed, and collusion -- all of which can be said to overturn classical views of the aristocracy as a people naturally fit to legislate. Many of these issues remain intact more than two centuries later, even if the terms have changed. We may not have a political aristocracy -- if we exclude the Kennedys, Bushes, and Clintons. But what we find increasingly is a return to the classical notion from Machiavelli through Adam Smith and Edmund Burke that the elite classes were the most fit to govern: one based on the assumption that their wealth naturally insured them against greed, inclining them to be impartial and thereby have the nation's best interests at heart. What a crock said Paine and other contemporary radicals such as Mary Wollstonecraft and her future husband William Godwin. The wealthy were not only as avaricious as anyone else -- but were provided with legal opportunities to satisfy their desires.

Now just how did this work? Back then, aristocrats lobbied for their favored candidates for members of parliament; and the few who were enfranchised usually felt compelled to support them -- some out of veneration for the opinion of the great duke, others for fear of repercussions if they didn't heed his Excellency's most august advice. And now, as then, there were few scruples about spending vast sums on elections; in his popular Sermons to Asses of 1768, James Murray was one of the first to complain openly of candidates and their supporters spending upwards of 45,000 pounds -- the equivalent of 1.2 billion dollars: why couldn't this be put to more practical use, like feeding vast numbers of the poor?

Today, these relationships are not as obvious: we don't get personal visits from "the Donald" or the Koch brothers telling us to vote for "their" man. But this influence does persist in more covert ways as the wealthy have increasingly sought to buy their will, whether through networking with the politician, establishing think tanks like the Heritage Foundation and Cato institutes for the wonks, faux populist platforms like the Tea Party, or creating super-PACs. If anything, relationships between politicians and executives and their sharing of networks mirror the cozy relationships between 18th-century peers, relations, and their candidates of choice. Looming over all of this is the Supreme Court's sustained refusal from 2008 to overturn restrictions on spending limits for campaign contributions, especially with its decisions on Citizens United which posit corporations as individuals: and from which the Republican party has been garnering great strength. And even with these advantages, one-percenters like Ken Griffin, a founder of the Citadel hedge fund and billionaire supporter of Mitt Romney, continue to gripe that the wealth have insufficient influence on politics.

As such, it's not surprising that now, as then, we have policies dictated by the wealthy to favor the wealthy. It's worth pointing out that this problem is far from being a partisan matter--even if it's one most closely associated with the GOP. Let's not forget that Senate Democrats and Republicans have collaborated to preserve the loophole enabling hedge fund and equity managers to treat their fees as longterm capital gains rather than ordinary income: not to do so would most likely shrink campaign contributions. Let's not forget either that both parties agreed on the no-strings-attached bailout and our currently watered-down version of say-on-executive-pay: after all, in 2010, the Obama administration would limit proxy access in governance issues to those with at least a 5% stake in any given publicly traded company -- a measure that is met by few investors. Significantly too, Obama and the congressional Democrats have agreed that the exemption for the inheritance tax should remain at 10 million -- a policy that runs counter to Paine's idea in Rights of Man and Agrarian Justice that "overgrown estates" should be taxed at much higher rates since they are clearly luxuries. Whether our politicians are choosing to do such to protect their own family fortunes or those of their donors is immaterial -- what matters is the fact that they are legislating for the welfare of the wealthiest. Finally, much the same can be said for our politicians' near complicit silence on the artificially high prices of oil triggered by Wall Street's betting at present [spring 2012]. That's why Republicans blame Obama while Obama conveniently urges Americans to buy smaller cars. It's time to ask as Paine does, "Is it then, better that the lives of one hundred and forty thousand aged persons be rendered comfortable, or that a million a year of public money be expended on any one individual, and him often of the most worthless or insignificant character? Let reason and justice, let honour and humanity, let even hypocrisy ….and Mr. Burke, let George, let Louis, Leopold Frederick Catherine or Tippoo Saib answer the question." This is a question that we might equally pose to Jamie Dimon, John Thain, Lloyd Blankfein, and all TARP recipients as well. As such, Paine's words on the broken government in 18th century England also come in quite handy:

Everything in the English government appears to me the reverse of what it ought to be, and of what it is said to be. The Parliament, imperfectly and capriciously elected as it is, is nevertheless supposed to hold the national purse in trust for the nation; but in the manner in which an English parliament is constructed it is like a man being both mortgagor and mortgagee….Neither the Ministerial party nor the Opposition will touch upon this case. The national purse if the common hack which each mounts upon…..They order these things better in France.

It didn't make any difference if Whigs or Tories were in charge--any more than it does in the case of Democrats or Republicans so long as they refuse to address the inequities between the 1% and the 99%.

In all of this, the lives of ordinary Americans have been adversely affected. Over the last 30 years, for instance, it has also become more difficult for the middle and working classes to attend college -- just like in the 18th century. Back then, the aristocracy sought to keep the rest as ignorant as possible, -- or to put it in Paine's words, "it is only "aristocratical and monarchical government that requires ignorance." Nor is our 1% any different as they clearly intend to keep the doors to higher education shut, regardless of their lip service to meritocracy and equal opportunity. With the precipitous decrease of grants, especially Pell grants, students can barely afford rising tuition--and indeed, our most elite private and public universities are now predominantly attended by students from wealthy families earning at least $210,000 annually.

Indeed, the fact that Ivies and other highly selective universities privilege sons and daughters with primary alumni connections by as much as 40% while setting aside places for the children of politicians, entertainers, moguls reveals nothing short of a Burkean ethos at work: one that is especially ironic in light of admissions at British universities, Oxford and Cambridge included, where alumni relationships and contributions receive scant weight. This culture of coddling the elites is equally evident in the rampant grade inflation where lax 18th-century standards at Oxbridge would appear to be matched by lax standards today at the Ivies: for instance, Harvard, where as many as 91% graduate with Latin honors and 45% of students receive A's because few professors want to upset potential donors and their parents. In all, one can't help but think of Paine's remark that "This is the general character of the aristocracy, or what are called Nobles or Nobility, or rather No-ability, in all countries." And so the show goes on as our bastions of higher learning continue to pretend that their student base is comprised of the "best and the brightest" -- probably the very same kind of folks who produced the crisis of 2008 and are also responsible for corporatizing universities over the last 30 years. After all, if a mediocre student receives an A, doesn't he automatically have a right to expect a multi-million dollar compensation, regardless of actual performance?

Not least, with the growing trend in the wealthiest residing in gated communities and exclusive enclaves, while the poor and middle classes bear a greater burden of increased property taxes in their towns and federal assistance to states is rapidly shrinking, we are closer to 18th century Britain than we realize.

So today, I think Paine would agree with Occupy Wall Street that the 99% continues to be shortchanged. He would agree, as stated by the declaration of OWS, that "no true democracy is attainable when the process is determined by economic power" and that corporations, "which place profit over people, self-interest over justice, and oppression over equality, run our governments." He would probably remind us too that "reason and discussion will soon bring things right, however wrong they may begin. By such a process no tumult is to be apprehended," because "the poor in all countries are naturally both peaceable and grateful in all reforms in which their interest and happiness is included. It is only by neglecting and rejecting them that they become tumultuous." With the approach of Spring in just two days and a revival of Occupy Wall Street, let's remember Paine's concluding words in Rights of Man:

It is now towards the middle of February. Were I to take a turn into the country, the trees would present a leafless, wintery appearance. As people are apt to pluck twigs as they walk along, I perhaps might do the same, and by chance might observe, that a single bud on that twig had begun to swell. I should reason very unnaturally, or rather not reason at all, to suppose this was the only bud in England which had this appearance. Instead of deciding thus, I should instantly conclude, that the same appearance was beginning, or about to begin, every where; and though the vegetable sleep will continue longer on some trees and plants than on others, and though some of them may not blossom for two or three years, all will be in leaf in the summer, except those which are rotten. What pace the political summer may keep with the natural, no human foresight can determine. It is, however, not difficult to perceive that the spring is begun.

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